Flagging tourism prompts Jackson to hike room tax

Tourists staying in Jackson County will pay more on their hotel bills starting Jan. 1. Commissioners this week hiked the tax from 3 to 6 cents, the highest room tax rate allowed by state law.

“If this money is spent wisely, I think it might be a good thing,” Dillsboro Inn owner T.J. Walker said Tuesday. “I’m not against it — but I’m not aware of it enough to be for it, either.”

Jackson County will have twice the room tax of most Western North Carolina counties, which largely set the rate at 3 percent. Haywood and Buncombe have 4 percent, Henderson has 5 percent. Only the town of Franklin has a room tax of 6 percent, though outside the town limits in the rest of Macon County it is only 3 percent.

Jackson County commissioners approved the room tax hike this week in a 4-1 vote, with Commissioner Mark Jones of Cashiers casting the lone no vote.

This summer, Jackson County received authorization from the state legislature to increase its room tax up to 6 percent, but had to vote to enact it.

Before voting, county leaders reviewed tourism-related information about neighboring counties. It shows Swain County is leading the pack, with 3,210 tourism-related jobs compared to 560 in Jackson County — a difference likely accounted for by the Nantahala Gorge outdoor scene and Harrah’s Cherokee casino.

Jackson County, like most counties, has seen a decline in room tax collection rates with the recession; starting about four years ago. The past couple of years, room tax collections have been rebounding, but Jackson seems to have faired worse than its neighbors, with bigger drops and a weaker rebound.

“We need to redouble our efforts to attract tourists to Jackson County,” Commissioner Doug Cody said. “Anything we make off tourism helps relieve pressure off of property taxes … these are taxes tourists pay. The citizens of Jackson County will not be burdened with another tax.”

Commissioner Charles Elders described the numbers that show Jackson lagging “troubling.”

Jones, who chairs the Cashiers Area Travel and Tourism, did not specify exactly why he voted against the tax increase. But he did caution his fellow commissioners that “I hope the intent of these monies is to stay within the original intent,” that is, to market and promote tourism.

New state language in the law, Jones said, allows “it to be piggybacked on, it allows for hardscapes — as long as it promotes tourism.” Historically, room tax — under state law — had to be spent on tourism promotion. Now, it can be spent on “tourism-related” developments, which could include sports fields to attract tournaments, greenways or festival venues.

County Manager Chuck Wooten said the original 1987 resolution by Jackson County authorizing a room tax would need modifying before any actions except promotion could take place.

“We don’t have to decide that right now,” Chairman Jack Debnam said.

The formula for distributing the additional room tax is unclear. Currently, 75 percent of room tax collected in Cashiers is used exclusively by Cashiers to promote that area rather than the county as a whole. The rest of the room tax is managed by the countywide Jackson County Travel and Tourism Authority, a public body.

Current tax rates

Haywood County 4 percent

Jackson County 3 percent

Macon County 3 percent, plus town of Franklin imposes an additional 3 percent

Swain County 3 percent

Collection rate comparison

Jackson County

• 2006-2007 $506,574.48

• 2007-2008 $506,004.53

• 2008-2009 $429,378.27

• 2009-2010 $413,939.07

• 2010-2011 $446,339.59

Swain County

• 2006-2007 $305,352

• 2007-2008 $320,820

• 2008-2009 $309,802

• 2009-2010 $335,353

• 2010-2011 $352,437

Haywood County

• 2006-2007 $935,000

• 2007-2008 $1.04 million

• 2008-2009 $954,000

• 2009-2010 $891,000

• 2010-2011 $962,500

Tourism rebound

Tourism spending is on the rise after three years of stagnation and decline. The North Carolina Division of Tourism, Development conducts an economic impact study every year. It uses the industry standard “Travel Economic Impact Model” to measure the impact of travel, a disaggregated model that looks at everything from lodging and food to retail and recreation. Here’s a decade’s worth of those tourism economic impact numbers.